Ministry to present Botswana Railways restructuring
Posted: 06 Mar 2008, 10:07
Ministry to present BR restructuring
04 March, 2008
BOPA
PARLIAMENT - The Ministry of Works and Transport will submit a proposal to cabinet for the recapitalisation and financial restructuring of the Botswana Railways (BR).
Minister Lesego Motsumi told Parliament during her ministrys budget request for the approval of P2.4 billion, that is, P1 467 788 410 for the recurrent budget and P988 980 000 for the development budget for the financial year 2008/2009.
The proposal recommends among others that the railway infrastructure be financed by government in future through equity contribution to BR and maintained by BR awarding long term maintenance contracts financed from user charges, she said.
She said the user charges are to be built gradually from the equivalent of one third of the required annual cost of infrastructure maintenance in 2008/2009 to 100 percent by 2012/2013.
Ms Motsumi noted that the operating results for the quarter ended 30th September 2007 showed that the BR was still making operating losses.
This, she said, was because the implementation of the major income-generating activities driving the turnaround strategy has not began pending approval of funds for recapitalisation.
The operating loss has increased from P4 449m to P6 824m using September figures as a base, she said.
Minister Motsumi however said in spite of the operating loss, BR registered a net profit of P5 555m against a budget of P3 769m noting that profitability was due to income from investment rather than from operations.
BR embarked on a turnaround strategic plan to convert BR from a conventional rail transporter to a modern total logistics and transport service provider run on commercial lines.
She said a key intervention that is needed to drive the strategy would involve acquisition of additional rolling stock and locomotives to enable BR to carry targeted increases in traffic in future.
04 March, 2008
BOPA
PARLIAMENT - The Ministry of Works and Transport will submit a proposal to cabinet for the recapitalisation and financial restructuring of the Botswana Railways (BR).
Minister Lesego Motsumi told Parliament during her ministrys budget request for the approval of P2.4 billion, that is, P1 467 788 410 for the recurrent budget and P988 980 000 for the development budget for the financial year 2008/2009.
The proposal recommends among others that the railway infrastructure be financed by government in future through equity contribution to BR and maintained by BR awarding long term maintenance contracts financed from user charges, she said.
She said the user charges are to be built gradually from the equivalent of one third of the required annual cost of infrastructure maintenance in 2008/2009 to 100 percent by 2012/2013.
Ms Motsumi noted that the operating results for the quarter ended 30th September 2007 showed that the BR was still making operating losses.
This, she said, was because the implementation of the major income-generating activities driving the turnaround strategy has not began pending approval of funds for recapitalisation.
The operating loss has increased from P4 449m to P6 824m using September figures as a base, she said.
Minister Motsumi however said in spite of the operating loss, BR registered a net profit of P5 555m against a budget of P3 769m noting that profitability was due to income from investment rather than from operations.
BR embarked on a turnaround strategic plan to convert BR from a conventional rail transporter to a modern total logistics and transport service provider run on commercial lines.
She said a key intervention that is needed to drive the strategy would involve acquisition of additional rolling stock and locomotives to enable BR to carry targeted increases in traffic in future.